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The drawbacks of offshoring

Supplier: Anchorage Group By: Greg Haak - Component Specialist
11 January, 2016

The fall of the Aussie dollar means it's becoming more expensive for companies to source parts from overseas. In July 2011 the dollar peaked at 110c to USD but has recently dropped below 70c to USD. Importers have seen 40%+ increase in costs - not including recent increases in offshore labour costs.

Short to medium runs of pressed steel parts, metal componentry and stamped components can now be manufactured in Australia for similar landed costs to imported parts, with a number of added benefits. 

In addition to the obvious exchange rate fluctuations, costs that may not be apparent are many & varied: freight including domestic transport costs, international EFT charges, import duties and taxes, customs processing fees, additional warehousing expenses and increased inventory required to ensure increasingly long lead times don't adversely impact production. 

As well as the financial aspects involved in importing, metal components often arrive with high defect rates. Many firms have trialled importing components from countries with lower labour costs than Australia and have had the inevitable batch of faulty parts – often after two or three deliveries of acceptable components!

Typically, Australian Made componentry can be supplied in less than ¼ of the lead time of imported parts, and with greater consistency than imported components.

The secret to producing quality cost effective Australian components involves keeping with the times. During the lean times of the GFC, many companies chose to down-scale their capability, leaving the company unable to perform when required. Swift Metal Services has broken this trend, and continues to invest extra capacity to improve service to our clientele.

As leading contract manufacturers of metal componentry, the team at Swift Metal Services are committed to customer service and are constantly researching to ensure work methods and production processes are optimised for maximum efficiency.

Say goodbye to needless importing issues and start relaxing once you have a high quality and reliable Australian component and metal processing service. 

View the 10 things to consider when selecting an Australian Contract Manufacturing Partner.

SWIFT METAL SERVICES - the specialists of component manufacturing in Australia. 

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